Month: October 2011

The race for the White House is on: Republicans already have a number of candidates vying for the nomination, while President Obama – the incumbent Democrat – is gearing up for another election cycle. Most of the candidates in the race have the economy on their mind. Chief among their concerns are creating jobs for Americans and viable sources of revenue for the government. The nation’s worst financial crisis since the Great Depression has given rise to all kinds of ideas to spur job growth. Would legalized online gambling be one piece to this complicated economic puzzle that might alleviate the unemployment woes facing Americans?

Right off the bat, let’s state the obvious. Online gambling is definitely NOT high on any candidate’s list of solutions for the failing national economy, although it might be an alternative that would contribute towards a holistic solution to the nation’s financial struggles. Traditionally, the government looks to legalizing vice in tough times in an attempt to make some quick cash for the government. Additionally, allowing “vice activity” creates some jobs which are better than none. “Cash for the government” and “Creating Jobs” are definitely talking points for this upcoming election, but it remains to be seen if online gambling would actually become part and parcel of a candidate’s plan to improve America.

Most Republicans probably oppose legalizing online casinos citing moral objections vis a vi “family values”, taxation issues, and problem gambling. On the other hand, Democrats have been open to the idea but they lacked the clout necessary to get a bill through Congress. Former House Banking Committee Chair Barney Frank, D-Massachusetts, actually pushed a couple bills through his bipartisan committee that would have legalized and taxed online gambling in the USA. Unfortunately, Democratic leadership was never able to muster enough support to bring it to the House floor.

If a bill was able to be debated in Congress, would ALL the Republicans vote it down? Surprisingly, the answer is “No”. Ron Paul, R-Texas and a noted Libertarian, is one Republican in favor of legalized and taxed online gambling. Although the topic isn’t a central part of his presidential platform, Paul does believe that America is losing revenue in the current setting where gambling websites operate offshore. He takes a pragmatic approach to the issue: why not legalize online gambling here in the USA and redirect the money flow back to where it belongs?

Unfortunately, as of the date of this post, Mr. Paul is trailing in polls surveying registered Republicans most likely to participate in a Presidential primary vote. Governor Rick Perry from Texas, former Governor Mitt Romney from Massachusetts, Rep. Michele Bachmann from Minnesota, and businessman Herman Cain all have a substantial leads over Paul, despite the fact he enjoys significant grassroots level support among many loyal young people. Ron Paul can support online gambling to his dying day; but if he wants his beliefs to turn into law, he’ll have to get elected first.

To be sure, the top Republican candidates are steering clear of the issue altogether in an attempt to tap into steadfast Republican party support from Evangelicals in America’s Bible Belt. Any form of gambling – be it online or otherwise – is off the table for these voters, who tend to vote their religious views instead of commonsense approaches to solving America’s problems. Likewise, some Democrats are hesitant to line up behind a candidate that would support online gambling. Would America’s first online casinos, sportsbooks, or horse race books create social problems and epidemic levels of problem gambling?

Most likely, the answer to this question is probably not. Online gambling has already been legalized and regulated in several European nations including the United Kingdom, Ireland, Malta, and Cyprus. Studies mandated by each country’s respective government have not shown any sort of dramatic rise in problem gambling. The generally held belief is about 7% of all gamblers experience “problem gambling” behaviors. 3.5% all gamblers – or half of all problem gamblers – are pathological gamblers, the most serious form of the addiction. While these numbers represent a statistically significant number of people in each respective country, it remains to be seen whether or not these levels will rise as online gambling slowly gains global acceptance. At present time social services in each country have fairly adequate support for problem gamblers, which doesn’t include 12 step programs like Gamblers Anonymous.

So is online gambling right for America? It really depends on how it would be implemented. Prohibition fell when the government realized it could make money on a liquor tax. Las Vegas sprung up when Nevada needed extra money to pay its bills. New Jersey opened Atlantic City in the late 1970s as the East Coast’s version of Las Vegas, although the number of people visiting Atlantic City has fallen drastically with the development of regional Native American casinos and the slow national economy. Foxwoods Resort and Casino in Connecticut, operated by the Mashantucket Pequots, was once the world’s largest casino, now second only to new projects being constructed in Macau, China.

The government desperately needs income and Americans desperately need jobs. Maybe the negative social implications that come with increased legalized gambling will be offset by the positive new tax revenues and high technology jobs created when America’s first online casinos open for business. For now, however, the offshore gambling industry is still very much alive and happily flourishing while American politicians ignore what might be a boon for state and national treasuries.